The China (Shanghai) Pilot Free Trade Zone is expected to catalyze demand for logistics facilities in the eastern region of the city, helping reverse an imbalance that sees demand for such services heavily concentrated west of the Huangpu river. Since the Chinese government approved the new FTZ, companies dealing with trade, logistics and manufacturing have flocked to register businesses there. The FTZ is likely to benefit logistics companies in the Yangtze River Delta region by lowering their transportation and export costs. Investors will be encouraged to raise their stakes in the warehouse and logistics sector, driving rents and property prices to new highs. But while office rents in the FTZ have begun to soar, warehouse rates are relatively stable. “This is because most of the warehouse and storage facilities in Waigaoqiao are occupied. It will take time for the rent to go up as most of the tenants have signed three-year leases,” said Su Zhiyuan, head of industrial operations for real estate services company DTZ China. The FTZ will generate huge demand in the long run for high-quality warehouses situated there, said Chen. There are about 780,000 square meters of premium warehouse space within the zone. Daily rents are CNY1.1 to CNY1.5 per sq m, and the average vacancy rate is 20%. The corresponding rate in west Shanghai is just 1.4%.